Diamond is a mineral made of carbon atoms that crystallize in a unique arrangement. This crystalline structure gives diamonds their hardness, brilliance, and value.
Diamonds are formed at great depth within the earth, under conditions of very high temperature and pressure. Diamonds reach the surface through volcanic eruptions, and are subsequently mined, using various methods. The rough diamonds are then sorted, sold in big lots, and then resold to cutters who cut and polish the stones to bring out their maximum brilliance. Depending on the shape of the rough diamond, the cutter has a choice of what shape to cut the diamond. The polished diamonds are then marketed through diamond exchanges, dealers, wholesalers, and retailers, throughout the world.
The value of a polished diamond is a function of its 4 C’s. Carat weight is very important in determining the value, as prices are quoted “per carat”. Color and clarity also play an important role in pricing – the better is the color (closer to colorless) and the fewer are the inclusions and blemishes, the higher is the price. There may be a trade-off between these two properties – for example, preferring a better color, with somewhat less clarity. Finally, the shape of the diamond is another factor in its price. As a general rule, a marquise diamond will be more expensive as compared to a round brilliant stone of the same properties, while an emerald-cut diamond will sell at a somewhat lower price. Very good proportions and finish may also result in higher prices.
Because of the nature of the rough diamond market, with one company (De-Beers) controlling almost 80% of the supply, the availability of rough stones for cutting and polishing is restricted. Therefore, prices of polished diamonds tend to increase somewhat every year. For example, the price of a 1.50 ct round brilliant diamond, graded as E in color and VS 2 in clarity, increased by more than 7% since January 1998. Thus, diamonds tend to appreciate in value over time.
Pricing of smaller diamonds
Smaller diamonds, which are used as side diamonds in rings, pendants, tennis bracelets, and anniversary bands, are called melee. These diamonds range in weight from one point to twelve points (0.01 to 0.12 ct) and they are classified as small melee (stones from one to seven points) and large melee (eight points and above). Melee diamonds have the same number of facets as the larger diamonds and are graded in the same way. For simplicity, their pricing is based on three different qualities: A, B, and C.
Quality A B C
Color F/G H/I J/K
Clarity VS1/VS2 SI1/SI2 SI3/I2
Small (.01 – .07ct) $800/ct $600/ct $400/ct
Large (.08 – .12ct) $1,000/ct $800/ct $600/ct
The above prices exclude jewelry work, such as setting and sizing.
Diamond certificates and jewelry appraisals
Most higher-value diamonds are accompanied by a certificate issued by an independent gemological laboratory. These laboratories provide, for a price, an objective evaluation of the physical properties of the diamond tested, such as its dimensions, weight, angles, grades of color and clarity, and a drawing indicating the location of any inclusions and/or blemishes within the diamond or on its surface. The laboratories serving the domestic diamond industry include the G.I.A. in California, The E.G.L. in both California and New York, and the I.G.L. in Europe and the Middle East.
The certificates do not attempt to estimate the monetary value of the diamond – this can be done by a qualified appraiser, using strict guidelines and price-lists accepted by the industry. EME, Inc.’s president is a G.I.A. qualified diamond grader and we’ll provide a retail appraisal for insurance replacement purposes with the sale of high-cost diamonds and jewelry.